Wednesday, March 05, 2008

Name That Company!

Hands down the most surprising commentary on any conference call this earnings season—at least to the ears of NotMakingThisUp—came during the question-and-answer session of a publicly traded company that has been going through the earnings wringer for the last two years, sells a product that requires an immense amount of borrowed money, and is almost universally dismissed, investment-wise, by Wall Street’s Finest.

Rather than name the company ourselves, let’s see how carefully our readers pay attention.

The first reader to name the company, and the CEO who spoke the following words, gets the NotMakingThisUp award for meritoriousness in the realm of Not Making Things Up.

What we saw in Naples was a very high rate of sales compared to where we've been for the last year and a half. Shockingly so.

And even selling, as opposed to getting rid of spec inventory, selling some to-be-built product again in the Naples market. That rang a bell for us and indicated that we could be, it's only a four-week time period that I'm discussing with you, we could be on track for better times.

Washington, D.C. I think I was quoted as saying we were dancing off the floor. That was about a year ago, by recollection, and it faded. This time I'd characterize it as a glimmer of hope. We did get much stronger in the D.C. market and we got extremely strong in the Maryland-D.C. marker as opposed to the northern Virginia-D.C. market. But I'm not willing to say as of this call that we're back.

It's a glimmer and let's hope that the good times stick for those markets.

Toll Bros. boss in Dec 2006 said some markets were dancing on the bottom.

When frothy markets turn bearish, those closest to the situation often make the worst calls. Could be wrong, but I think he is again being too optimistic. Housing downturns have historically taken several years.

Kevin wins...nothing material, but he wins, for being the first to correctly Name That Company.

Given the hostile reaction to Mr. Toll's non-hypey, is-what-it-is comments, we are officially reversing our August 2005 call ("anybody who buys a home they don't need is a moron") and declaring the first sign of life in the U.S. housing market has been spotted.

Datapoint; My father in law died over the winter. His small apartment in Margate FLA is for sale. There are many like it. The broker called this week to say activity has picked up and she expecys to sell it shortly.

I'd think the second sign of when the housing market hits bottom is when existing home sales in both the northeast and the west start to rise along with their midwestern and southern counterparts. I've included a link here for your readers.